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amount, we are generally permitted to estimate the deductible
amount. Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir.
1930). To apply the Cohan rule, the Court must have a reasonable
basis upon which an estimate can be made. Vanicek v.
Commissioner, 85 T.C. 731, 742-743 (1985). Without such a basis,
any allowance would amount to unguided largesse. Williams v.
United States, 245 F.2d 559, 560 (5th Cir. 1957). However, the
strict rules of substantiation that apply to certain business
deductions described in section 274(d) supersede the rule in
Cohan v. Commissioner, supra at 544. Sanford v. Commissioner, 50
T.C. 823, 827-828 (1968), affd. per curiam 412 F.2d 201 (2d Cir.
1969); Keating v. Commissioner, T.C. Memo. 1995-101; Jeffers v.
Commissioner, T.C. Memo. 1986-285; sec. 1.274-5T(a)(4), Temporary
Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985).
Petitioner did not provide any receipts or any other
evidence to establish when the computers, monitors, and fax
machine were purchased, or the cost of the items. Petitioner
testified that the amount he claimed on his Schedule C for the
computers and peripheral equipment was “a little over-inflated”
and that one of the computers was not even purchased in the tax
year in issue. There is insufficient evidence to establish that
these items were purchased during the year in issue, or to
substantiate the cost. Accordingly, petitioner is not entitled
to a deduction for his computers, monitors, and fax machine.
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Last modified: November 10, 2007